Press Release Details
The 100th Annual General Meeting of Balmer Lawrie and Co. Ltd 14 September 2017
The 100th Annual General Meeting of Balmer Lawrie & Co. Ltd. was held at Kolkata on 14th September, 2017.
Below is an extract of the Chairman’s Speech:
Balmer Lawrie completed 150 years of its foundation last year and this is the Company’s 100th AGM. This is a unique happening and an awe-inspiring milestone in Balmer Lawrie’s corporate journey. Very few organisations are fortunate to achieve such a rare distinction in its corporate life cycle. The sheer hard work, determination, foresightedness, able leadership and perseverance of all the stakeholders have made it possible for the Company to complete its journey of 150 years with a glorious track record of being profitable always.
Overall Financial Performance
During the financial year 2016-17 the gross turnover increased by 6.91%. The Company recorded gross turnover of Rs.1,90,117 Lakh as against Rs.1,77,836 Lakh in 2015-16. The Company recorded a Profit Before Tax of Rs. 25,411 Lakh in 2016-17 as against Rs. 24,021 Lakh in 2015-16, the increase being attributable primarily to increase in Profits earned by Logistics Services, Travel & Vacations, Leather Chemicals and Refinery & Oil Field Services Verticals
The Board of Directors has recommended a dividend at the rate of Rupees Seven per Equity share for the financial year 2016-17 for declaration by the members at the 100th Annual General Meeting.
Performance of Strategic Business Units (SBUs)
Balmer Lawrie is a diversified PSU with a presence in both manufacturing and service sectors.
Industrial Packaging (SBU: IP)- During the year, SBU: IP maintained its profitability in spite of increase in steel prices. Higher sales volume was accomplished despite shrinkage of available market in the wake of directives to Government Organisations and PSUs to procure MS Drums only from Small & Medium Enterprises.
Greases & Lubricants (SBU: G&L) – In 2016-17, despite severe price competition from PSU Oil Companies, major MNCs and other private players, the SBU has been able to better its overall performance level in terms of production and sales as compared to last year. The bottomline for the year has, however, been affected due to abnormal increase in price of Lithium Hydroxide, increase of base oil prices in the second half of the year and increase in other input costs which could not be passed on to the customers fully because of the competitive market situation and contractual delivery terms.
Leather Chemicals (SBU: LC)- The SBU: LC sees opportunity in increasing sales through newly introduced products, matching the quality offered by products of reputed MNCs and yet competitively priced. Opportunity also lies in the syntan market space where SBU: LC can penetrate further. New Beam House chemicals developed by the Company have been well appreciated by the customers. The SBU: LC has plans to foray into the Finishing Chemical segment by leveraging the existing distribution network, technical service centers and cordial relationship with customers to its advantage.
Logistics (SBU: L)- Under this SBU, there are two verticals viz., Logistics Infrastructure and Logistics Services.
Logistics Infrastructure – Balmer Lawrie’s first state-of-the-art Temperature Controlled Warehouse (TCW) was commissioned in Hyderabad in March 2016. The second TCW has been established at Rai and is ready for operation. Some statutory approvals are awaited from the State Government. The third one at Patalganga near Taloja, Navi Mumbai is expected to be ready for commercial operation by end of this fiscal.
Balmer Lawrie is setting up its Multi Modal Logistics Hub (MMLH) project at Vizag in partnership with M/s Visakhapatnam Port Trust (VPT). In this MMLH, facilities will be created for handling Exim and Domestic Cargo. The commissioning of the same is expected in the last quarter of financial year 2017-18.
Logistics Services - Air freight services continues to be a dominant activity of the SBU and provides more than 62% (earlier 50%) of the SBU’s overall topline. The dismantling of Transchart has opened up new opportunities in Ocean freight activity, which the SBU is keen to capitalize on. As Balmer Lawrie is in CFS operations since 1994, its relationship with Shipping Lines can be leveraged to get more competitive rates for ocean freight which in turn can help it in grabbing more ocean freight business.
The Logistics Services vertical during 2016-17 achieved the highest ever topline and PBT registering a growth of 13% in Turnover over the previous year, which is primarily on account of surge (15% growth YOY) in air freight and ocean freight activities. Profitability improved due to better sales mix and handling of a higher volume of Project logistics. Balmer Lawrie is also taking adequate steps to mitigate the challenges by increasing the global network of associates and offering clients single window logistics solutions. The SBU has revamped its existing technology and has plans to further upgrade the same in the near future to meet future business challenges.
Travel & Vacations (SBU: T&V)– The SBU has continued to provide sizeable turnover from the Travel and Vacations business despite stiff challenges in the Travel industry.
In the last one year, the Company has strengthened its position in the leisure travel segment of the retail market and the Vacations vertical has added many retail clients. It is expected that this vertical will play a significant role in the SBU’s growth as an end to end travel solutions provider in the coming years.
While business travel, holiday trips dominate outbound volumes, people are also opting for niche products like sports tourism, luxury travels, honeymoon packages and cruises. The SBU is set to grow in these areas as well. Low cost carriers have started operating on both domestic and international sectors and are adding new aircrafts. This will certainly help in growth in volumes of the industry.
The ticketing vertical continues to be topline driver for the Company.During the year, the topline almost remained flat. This is because of the average fares coming down sharply in 2015-16 compared to 2014-15 due to reduction in aviation fuel prices. However, the number of tickets booked went up significantly for the SBU. The SBU’s financial performance was also noteworthy as it improved compared to the previous year.
Refinery and Oil Field Services (SBU: ROFS)- In 2016-17, the SBU: ROFS has achieved growth above the last year’s turnover and also substantial increase in segmental profit. The SBU: ROFS has also achieved substantial job booking for the next financial year. This is owing to high market demand for services in the current year along with improvements in operational efficiency and effective cost control.